AIG Sonbo, Medical Advisory Bias... Unfair Non-Payment of Insurance Claims Detected (Comprehensive)

Financial Supervisory Service, Improvement Measures

[Asia Economy Reporter Oh Hyung-gil] The American-based AIG Insurance received improvement orders from financial authorities due to inadequate guidance on the medical advisory system and independent adjusters.

According to the insurance industry on the 5th, it was revealed that AIG Insurance received 60% of third-party medical consultations from its own medical advisory specialists from 2017 until March of last year.

Insurance companies seek medical opinions through consultants for diagnoses of diseases or disabilities. For impartial opinions, with the consent of the policyholder, they can request consultations from third-party medical institutions and use them for insurance claim reviews. However, in such cases, the insurance company must explain the medical advisory results to the policyholder and obtain the beneficiary's consent. Additionally, the insurance industry generally excludes specialists who have conducted medical consultations within the past year when requesting third-party medical consultations.

However, it was confirmed that AIG Insurance provided insufficient guidance regarding the ability to review or receive copies of medical advisory result documents and the possibility of third-party medical consultations. In particular, medical consultations were concentrated with specific consultants. 40.3% of all medical consultations were conducted by 18 specialists.

The financial authorities notified AIG to strengthen guidance on medical advisory results and third-party medical consultation procedures, establish objective consultant selection procedures, regularly check compliance, and improve the medical advisory system to operate fairly and transparently.

Additionally, AIG Insurance provided information on the appointment of independent adjusters through its website, but some notices were unclear regarding the right to appoint independent adjusters and related appointment costs, raising concerns that policyholders might mistakenly believe they bear the appointment costs.

AIG Insurance operates insurance claim review standards but was found not to promptly reflect the latest precedents or dispute mediation cases. They were ordered to thoroughly train claims handlers and improve claims-related work procedures so that insurance claim reviews and payments can be made in accordance with the intent of precedents and dispute mediation cases.

Furthermore, financial authorities detected that AIG Insurance unjustly withheld insurance payments due to violations of pre-contract disclosure obligations. AIG Insurance withheld 16 million KRW in insurance payments for five contracts, contrary to insurance policy terms.

For two contracts, 15 million KRW was not paid due to pre-contract disclosure violations unrelated to insurance accidents, and although the policyholder claimed insurance for radiofrequency ablation surgery for thyroid nodules and benign thyroid tumors, 1 million KRW for surgery insurance was not paid. The financial authorities issued a notice requiring voluntary handling regarding the unpaid insurance claims.

This content was produced with the assistance of AI translation services.